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TMI BlogInput Service distributorX X X X Extracts X X X X X X X X Extracts X X X X ..... Input Service distributor X X X X Extracts X X X X X X X X Extracts X X X X ..... vice distributor can pass on credit of service tax to its branch office. Reply By Himansu Sha: The Reply: In proportion of the turnover of the individual units. The credit which are common will be only distributed. The credit which are directly relating to any unit, such credit will be given to that unit. Reply By Himansu Sha: The Reply: The distributor needs to take regn and will issue invoic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to the units Reply By Ganeshan Kalyani: The Reply: The common credit can be transferred to unit on turnover basis. The credit should be an eligible credit. The input service should be common for all units. Any input is availed for specific unit that credit should be distributed to that unit only. ISD has to issue invoice to the receiving unit based on which the receiving unit can claim the cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit. The correctness of the credit being distributed is with the input service distributor which distributes the credit. The ISD has to submit return and receiver of the service has also to file return half yearly basis. The receiving unit should have excisable goods. If the unit is manufacturing both excisable and non excisable then the ISD has to work out the credit to the proportion of excisab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le goods and distribute only the eligible credits. The credit so received by the unit can adjust it against the excise duty payable based on the document issued by the ISD. The ISD should support the invoice with the working showing the inovice details and the basis of working as to how he has arrived at the distributable figure. This will answer the basis doubts in case of audit. If the invoice r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived by ISD in its address then only the same should be considered for the purpose of distribution. If the invoice is raised in the name of the unit but for the sake of accounting it has been received in the ISD address then such invoices can be straight away sent to unit to avail the credit. In such case turnover ratio is not to be referred to. First of all the service invoices received at ISD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be screened basis on eligibility. The ineligible credit should not be disturbed because it will invite rejection of credit at the time of audit by the auditor. Then obviously interest and even penalty may be asked to pay. Thus it is essential to avail the ISD model facility in a cautious manner. Every business model is different from other so you should be able to determine the working for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distribution of credit. Some assessee appoints consultant to seek advise and to formulate the working for distribution of credit keeping the business model in consideration. This helps in keeping audit points at bay. It also helps the assessee to carry ahead the working of ISD in a better way. This benefit is a pro assessee benefit. This has been provided in the law by the Government for the bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of the assesse. Thus the same should be availed in the way it has been provided in the law. It may be simple for you to work out if you have internal tax team. But it is always advisable to seek advise of practising consultant to move ahead in this way. There are many good and expert consultant in this Forum. You may approach one of them or the one you have already may have engaged. Thanks. Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve a good day. X X X X Extracts X X X X X X X X Extracts X X X X
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